Category : Books-Non-Fiction

Sub Category : History

What is a fair price? Well first off price is suggestive, you may not vaule a wool blanket, but some else may. So if someone is selling a wool blanket for 13$ then you may think it's over priced, but to the people who don't have a warm home, that 13$ is a cheaper way to warm up there home then buying a heater. Although price is suggestive there is a way to determine what the average vaule is. 

The main factor is supply, and demand. When there is more supply then demand, then the prices lower; however there are two types of supply. How common the product is, and how many people are selling. If there something uncommon, and only 1 company can sell it, then they can charge what they wish, as long as someone is willing to pay for it. If there something common, but one 1 company can sell it, then the price is going to be higher then it's supposed to be. If there something uncommon, but thousands of sellers, then the price is going to be lower then it's supposed to be. 

The next factor is the wealth of the buyers. If someone wants to sell something, they have to sell it at a price there buyers can afford. If the average income is 20,000$, but you're buyers only make 10,000$ then you must ethier make it affordable for them, or make the average person interested in this product. If there a motel that only the top of the 1% can afford, but it's in a bad neighborhood, and is extremely run down, then that motel will go out of business. Now if there a hotel made for the rich, but someone make 10$ an hour could afford to live there, then that hotel is probably gonna go out of business. 

The third factor is what are you paying for. There are 3 things that directly influence price. Wages, rent, and profit. These pay for the means of production. Wage pays for labor. Rent pays for land, and/or capital. Profit pays the capitalist. The profit is suggestive, the capitalist determines how much extra they want to earn, but the buyer has to be will to pay for that. If someone is lowering there prices, they should lower there profit first for fast results, then lower the other costs of production. You may pay for wage, and/or labor. If someone is selling rocks they found. Then you're paying for there profit, and the wage (labor). If you rent an apartment, but you also work for the land owner. You're paying your rent with the wage he gives you. If you get a loan, your paying for there profit, nothing else. When you rent an apartment, you pay rent, wages, and profits. 

You may, or may not notice a mistake. "When you rent an apartment, you pay rent, wages, and profit." You maybe wondering how can the lower middle class afford apartments. This is because there both personal costs, and collective costs. When you rent an apartment, rent is a personal cost, profit is a collective cost, and wages is a mixture, but mostly a personal cost. Let's say you and 100 people live in that apartment complex. You independently pay your rent; however you pay 1/100th of profit, and you pay for what you request the workers to do, but whether, or not you request anything, you automatically have to pay 1/100th of the amount per hour. A group can collectively buy something. A family work to pay there bills. You pay taxes to buy public property, and public jobs. Some ideologies, such as communism, and Socialism, focus more on collective payment, while other, such as capitalism, focus on personal payment. 

The last factor were gonna take about is knowledge. No matter how many factors we examine, the price is unpredictable. This is because people don't know everything. If there a store that sells everything for a cheaper price, and at better quality, it still can fail if people don't know about it. This means that the average price could be higher then it's supposed to be, because the lowest price, and best quality, is unknown. There also brand loyalty, people believe that one certain brand always have the best price, and best quality, even though it may just be the second best. If there was no brand loyalty, no false advertisement, and we all could think of each factor before shopping, then we would progress alot faster as a society, but that would mean that there would be no accidental growth, such coke which was advertised as a magical drink that could cure certain illnesses without side effects.